Egypt aims to accelerate privatisation programme, no int’l bond issuance in current FY23/24: Finance minister

Doaa A.Moneim , Wednesday 17 Apr 2024

Egypt’s government plans to complete the privatization of the state-owned companies within a period of 3 to 5 years, Minister of Finance Mohamed Maait stated to Asharq News.

A file photo of Egypt s finance minister Mohamed Maait. Al-Ahram


Maait made his statements during the annual meetings (Spring Meetings 2024) being held in Washington by the World Bank Group and the International Monetary Fund.

A delegation from the Egyptian government is participating in the Spring Meetings. the delegation includes the Minister of International Cooperation, Rania Al-Mashat, the Governor of the Central Bank of Egypt, Hassan Abdalla, and Maait.

Highlighting the ongoing nature of the privatization process, Maait emphasized that the government remains committed to the program, despite the large number of companies involved

Initiating it in March 2023, The Egyptian government listed 40 companies across 18 sectors to go public under its initial public offering (IPO) programme as a key commitment under its loan deal with the IMF that aims mainly to raise the private sector share in the country’s economic activity; especially in the state-owned assets to create new job opportunities and increase the country’s GDP growth.

The IMF has recently expanded the loan deal from $3 billion to $8 billion till 2026 and completed the first and second reviews under it.

During a seminar held on the sidelines of the Spring Meetings, Maait also revealed that Egypt does not anticipate issuing government bonds in the international market before the end of the current fiscal year, which concludes on 30 June.

He also stated that the privatization efforts will continue, adding that the International Finance Corporation (IFC), a strategic advisor to Egypt's privatization program and the financing arm of the World Bank Group, is responsible for examining all companies without discrimination and exploring suitable options for the future.

Maait previously stated that the programme seeks to generate $6.5 billion in returns in 2024, in addition to the $3.1 billion already obtained from government offerings between March 2023 and February of this year. Moreover, an additional $2.5 billion was generated through divestment from government assets in 2022.

The program targets divestment from seven sectors, including pharmaceuticals, chemicals, and construction, while reducing investments in another seven sectors, including power stations. Simultaneously, it provides opportunities for private-sector investment in four sectors.

During the seminar, the minister said that the government focuses on maintaining the country’s financial stability after undergoing a severe economic crisis.

According to Maait, the primary focus is to collaborate with the Central Bank of Egypt (CBE) to reduce inflation rates and bring them closer to the target of approximately seven percent, along with a priority of a decline in interest rates, as the Minister regards interest payments as the most significant challenge in managing the budget.

CBE targets to bring inflation down to seven percent (±2 percent) in the fourth quarter of 2024. The IMF’s latest projections indicate that Egypt’s inflation will hit its peak in 2024 to reach over 32 percent before descending to approximately 25 percent in 2025.

The Minister underscored the importance of developing human capital, enhancing the healthcare sector, and improving education. Additionally, he aims to achieve growth rates of around six percent to seven percent, cautioning that the country is targeting a growth rate of 4.2 percent for the next fiscal year.

The IMF has maintained its expectation for the country’s real GDP growth at three percent in the current FY2023/2024 before rebounding to over four percent in the upcoming FY2024/2025 that starts on 1 July.

He also emphasized the necessity of empowering the private sector to assume a leading role as the influence of the public sector diminishes, expressing readiness to procure services and products from the private sector.

Short link: